ABSTRACT
The 1980s were a decade of international imbalances—of unprecedented trade deficits and volatile exchange rate swings. Forecasting the future of a complex system like the international economy is more than difficult – it is impossible. Over the half-century since the conclusion of World War II, international trade has consistently grown faster than global production of goods and services. The structure and operation of the international monetary system have been transformed. Economies in Europe and East Asia have closed the gap in per capita incomes vis-a-vis the United States. The implications for trade of economic liberalization in Eastern Europe are more difficult to project. These countries will surely trade more with the West and less with what was the Soviet Union. A logical inference to draw from German unification is that official statistics overstated the productivity of Soviet industry and agriculture, just as they overstated those of the German Democratic Republic.
